Telkom's Plan to Acquire Indonesia Tower Toppled State-owned telecommunications giant PT Telekomunikasi Indonesia announced on Friday that its PT Dayamitra Telekomunikasi subsidiary had scrapped plans to acquire PT Solusindo Kreasi Pratama after failing to reach an agreement after months of negotiations.
The main business of Dayamitra Telekomunikasi, also known as Mitratel, is supporting telecom infrastructure, but the parent wants its unit to focus more on operating telecom towers. "The planned acquisition of the majority stake of Indonesia Tower [Solusindo Kreasi Pratama] will not proceed," Agus Murdiyatno, Telkom's vice president for investor relations, said in an e-mailed statement, without elaborating on how the deal soured. "This event will not disrupt Mitratel's business. Going forward, it will continue to focus on its tower business." On Aug. 18, Telkom announced that Mitratel had agreed to acquire an 80 percent stake in Indonesia Tower, pending final adjustments to the proposed deal. Indonesia Tower is in the telecom tower business, and owns and operates 800 towers that provide service for 1,400 clients, including shopping malls and housing complexes. The firm posted revenue of Rp 300 billion ($31.8 million) last year. "The acquisition plan was a part of Telkom's move to gradually shift ownership of its existing towers to Mitratel," Telkom spokesman Eddy Kurnia said in August. Telkom has about 22,000 towers 20,000 for Telkomsel, its GSM-based cellular provider, and the rest owned by its CDMA Flexi unit. It is seeking to consolidate it towers under Mitratel to streamline the business. Analysts said Mitratel's revenue could reach Rp 1 trillion or more if it absorbed all of Telkom's and Indonesia Tower's towers. Edwin Sinaga, president director of brokerage PT Finacorporindo Nusa, said the news would have little effect on Telkom. "I don't think it will impact too much on Telkom because it is still the leader in the tower provider business," Edwin said. Meanwhile, Telkom is still looking a buyer for a 40 percent stake in PT Patra Telekomunikasi, its network solutions provider, even though it first offered it in August. Telkom is also trying to sell its minority stakes in satellite operators PT Citra Sari Makmur and PT Pasifik Satelit Nusantara, to enable it to focus on its core business.
